Cabot Q1 Profit Rises Four-fold, Results Beat Estimates

(RTTNews) - Specialty chemicals and performance materials company Cabot Corp. (CBT) on Wednesday reported a profit for the first quarter that rose four-fold from last year, reflecting higher revenues, volume improvements, and one-time gains. Both revenue and adjusted earnings per share beat analysts' estimates.

Patrick Prevost, President and CEO of Cabot said, "We delivered our second best quarter in the history of our Reinforcement Materials segment along with strong performance in Advanced Technologies and Performance Materials. In addition to recovery in global demand, our volumes grew year over year through the successful commercialization of new capacity and the addition of our Mexican carbon black acquisition."

Prevost added, "However, I was disappointed by another difficult quarter in Purification Solutions as we continued to face operational issues that resulted in lower volumes and cost increases."

Net income attributable to Cabot for the first quarter increased to $80 million or $1.23 per share from $20 million or $0.31 per share in the year-ago period.

The latest quarter's results include a benefit of $0.37 per share from certain items, principally related to a gain recognized on the company's existing investment in its Mexican joint venture as a result of the acquisition of the remaining 60 percent common equity that the company did not previously own.

Excluding items, adjusted earnings for the quarter were $0.86 per share, compared to $0.66 per share in the same period last year. On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.71 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter rose 10 percent to $899 million from $820 million in the year-ago period. Analysts had a consensus revenue estimate of $854.67 million for the quarter.

The company recorded double-digit year over year volume growth in Reinforcement Materials and Performance Materials segments.

Looking ahead, Prevost said, "We are increasingly optimistic about fiscal 2014 after seeing the recent positive demand trends in our Reinforcement Materials and Performance Materials segments."

Cabot expects the tire and automotive industry demand to improve in 2014 along with infrastructure-related spending, albeit at a modest pace. In the company's specialty fluids business, the company noted that the longer-term pipeline of projects remains strong, but it expects to see a lower level of activity in the coming months as compared to recent quarters.

Cabot added that in the purification solutions segment, it was focused on improving its operational performance to restore profitability and preparing for growth in the North American market.

CBT closed Wednesday's trading at $47.32, up $0.07 or 0.15 percent on a volume of 362,950 shares.